HBT Financial, Inc. Announces Fourth Quarter 2020 Financial Results

Fourth Quarter Highlights
Net income of $12.6 million, or $0.46 per diluted share; return on average assets (ROAA) of 1.38%; return on average stockholders’ equity (ROAE) of 14.00%; and return on average tangible common equity (ROATCE)⁽¹⁾of 15.12%Adjusted net income⁽¹⁾of $12.4 million; or $0.45 per diluted share, adjusted ROAA⁽¹⁾of 1.36%; adjusted ROAE⁽¹⁾of 13.71%; and adjusted ROATCE⁽¹⁾of 14.81%BLOOMINGTON, Ill., Jan. 28, 2021 (GLOBE NEWSWIRE) — HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial”), the holding company for Heartland Bank and Trust Company, today reported net income of $12.6 million, or $0.46 diluted earnings per share, for the fourth quarter of 2020. This compares to net income of $10.6 million, or $0.38 diluted earnings per share, for the third quarter of 2020, and net income of $16.1 million, or $0.61 diluted earnings per share, for the fourth quarter of 2019.Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “Despite the ongoing challenges presented by the pandemic that have impacted loan demand in our markets, we continued to produce a high level of profitability. Our consistent performance reflects the strong foundation we have built upon an attractive, stable deposit base, conservative underwriting, and diverse sources of non-interest income.“With ample liquidity, capital and reserves, we are well positioned to continue supporting our customers and communities through this crisis while generating solid results for our shareholders. As economic conditions improve, we will be well positioned to continue growing our balance sheet through our ongoing expansion in our existing markets and potential acquisition opportunities, which we believe will help us to generate earnings growth and further enhance the value of our franchise in the years ahead,” said Mr. Drake.C Corp Equivalent Net IncomePrior to October 11, 2019, the Company operated as an S Corporation for U.S. federal and state income tax purposes. Effective October 11, 2019, the Company voluntarily revoked its S Corporation status and became a taxable entity (C Corporation). As such, any periods prior to October 11, 2019 only reflect state replacement taxes. To facilitate comparison, the Company reports its C Corp equivalent financial results, which do not reflect the additional shares issued in the initial public offering (the “IPO”) for periods prior to the IPO.The Company reported C Corp equivalent net income of $15.1 million, or $0.58 diluted earnings per share, for the fourth quarter of 2019.In addition to reporting C Corp equivalent results, the Company believes adjusted net income and adjusted earnings per share, which adjust for the additional C Corp equivalent tax expense for periods prior to October 11, 2019, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights (“MSR”) fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $12.4 million, or $0.45 adjusted diluted earnings per share, for the fourth quarter of 2020. This compares to adjusted net income of $10.8 million, or $0.39 adjusted diluted earnings per share, for the third quarter of 2020, and adjusted net income of $14.4 million, or $0.55 adjusted diluted earnings per share, for the fourth quarter of 2019 (see “Reconciliation of Non-GAAP Financial Measures” tables).Net Interest Income and Net Interest MarginNet interest income for the fourth quarter of 2020 was $29.2 million, an increase of 1.0% from $28.9 million for the third quarter of 2020 due primarily to growth in average interest-earning assets.Relative to the fourth quarter of 2019, net interest income decreased $3.1 million, or 9.6%. The decline was primarily attributable to lower yields on average interest-earning assets.Net interest margin for the fourth quarter of 2020 was 3.31%, compared to 3.39% for the third quarter of 2020. The decrease was primarily attributable to a full quarter’s impact of subordinated notes issued in September 2020. The contribution of acquired loan discount accretion to net interest margin remained low at 2 basis points during both the third and fourth quarter of 2020.Relative to the fourth quarter of 2019, net interest margin decreased from 4.09%. The decrease was due primarily to the decline in the average yield on earning assets. The contribution of acquired loan discount accretion to net interest margin was 2 basis points during the fourth quarter of 2019.Noninterest IncomeNoninterest income for the fourth quarter of 2020 was $11.1 million, an increase of 10.3% from $10.1 million for the third quarter of 2020. The increase was partially attributable to a $0.6 million increase in wealth management fees. Fourth quarter 2020 results included a positive $0.4 million mortgage servicing rights (“MSR”) fair value adjustment compared to a negative $0.3 million fair value adjustment in the third quarter of 2020.Relative to the fourth quarter of 2019, noninterest income increased 7.3% from $10.3 million. The increase was primarily attributable to higher gains on sale of mortgage loans and higher wealth management fees. Partially offsetting these increases were a $0.5 million decline in service charges on deposit accounts and a $0.4 million decline in other noninterest income.Noninterest ExpenseNoninterest expense for the fourth quarter of 2020 was $22.7 million, an increase of 0.8% from $22.5 million for the third quarter of 2020. The increase was primarily attributable to a $0.3 million increase in data processing costs, including $0.2 million of nonrecurring costs related to systems conversion for the consolidation of State Bank of Lincoln into Heartland Bank and Trust Company.Relative to the third quarter of 2019, noninterest expense increased 3.3% from $22.0 million. Lower loan collection and servicing expense was more than offset by increases in FDIC insurance, data processing and other noninterest expenses. Loan PortfolioTotal loans outstanding, before allowance for loan losses, were $2.25 billion at December 31, 2020, compared with $2.28 billion at September 30, 2020 and $2.16 billion at December 31, 2019. The $32.6 million decrease in loans from September 30, 2020 includes a $16.2 million decrease in PPP loans. The remaining decrease was not attributable to any specific factor. The $80.3 million decrease in total loans outstanding, net of PPP loans from December 31, 2019 was primarily due to a $43.2 million reduction in balances on existing lines of credit and a $19.0 million decrease in balances of participation loans purchased.DepositsTotal deposits were $3.13 billion at December 31, 2020, compared with $3.02 billion at September 30, 2020 and $2.78 billion at December 31, 2019. Relative to the previous quarter, increases in interest-bearing demand, noninterest-bearing and savings balances were partially offset by declines in money market and time deposit balances in the fourth quarter of 2020.Asset QualityNonperforming loans totaled $10.0 million, or 0.44% of total loans, at December 31, 2020, compared with $15.2 million, or 0.67% of total loans, at September 30, 2020, and $19.0 million, or 0.88% of total loans, at December 31, 2019. The decrease in nonperforming loans from September 30, 2020 was primarily attributable to the pay down and subsequent return to accrual status of one agriculture credit that totaled $4.2 million at September 30, 2020 and $3.8 million at December 31, 2020. The $9.0 million reduction in nonperforming loans from December 31, 2019 was primarily due to the referenced agriculture credit that totaled $5.0 million at December 31, 2019, as well as the payoff/pay down of 5 loan relationships that totaled approximately $4.2 million since December 31, 2019.The Company recorded a provision for loan losses of $0.4 million for the fourth quarter of 2020, which was primarily due to a $3.2 million increase in specific reserves on loans individually evaluated for impairment, significantly offset by adjustments to qualitative factors to reflect changes in the economic environment and improved asset quality metrics.Net charge-offs for the fourth quarter of 2020 were $0.2 million, or 0.04% of average loans on an annualized basis, compared to net charge-offs of $0.2 million, or 0.04% of average loans on an annualized basis, for the third quarter of 2020, and net charge-offs of $0.6 million, or 0.11% of average loans on an annualized basis, for the fourth quarter of 2019.The Company’s allowance for loan losses was 1.42% of total loans and 319.66% of nonperforming loans at December 31, 2020, compared with 1.39% of total loans and 208.14% of nonperforming loans at September 30, 2020.CapitalAt December 31, 2020, the Company exceeded all regulatory capital requirements under Basel III and was considered to be “well-capitalized,” as summarized in the following table:

Stock Repurchase Program
On November 3, 2020, the Company announced that its Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $15 million of its common stock. The Company did not repurchase any shares of its common stock during the fourth quarter of 2020.Annualization FactorThe method used to calculate annualization factors for interim period ratios changed in the third quarter of 2020 from financial information previously presented. The annualization factor is now calculated using the number of days in the year divided by the number of days in the interim period. Prior to the third quarter of 2020, annualization factors were calculated as 4 divided by the number of quarters in the interim period, or an annualization factor of 4 for a quarterly period. The change was applied retrospectively to all periods presented and did not have a material impact on the annualized interim ratios.About HBT Financial, Inc.HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company. The bank provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois through 63 branches. As of December 31, 2020, HBT had total assets of $3.7 billion, total loans of $2.2 billion, and total deposits of $3.1 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back 100 years.Non-GAAP Financial MeasuresSome of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), originated loans and acquired loans and any ratios derived therefrom, efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, adjusted net income, adjusted return on average assets, adjusted return on average stockholders’ equity, and adjusted return on average tangible common equity. Our management uses these non-GAAP financial measures, together with the related GAAP financial measures, in its analysis of our performance and in making business decisions. Management believes that it is a standard practice in the banking industry to present these non-GAAP financial measures, and accordingly believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP; nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the “Reconciliation of Non-GAAP Financial Measures” tables.Forward-Looking StatementsReaders should note that in addition to the historical information contained herein, this press release includes “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals, future earnings levels, and future loan growth. These statements are subject to many risks and uncertainties, that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impacts of the COVID-19 pandemic and governmental responses to the pandemic on our operations and our customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect our capital levels and earnings, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses; our asset quality and any loan charge-offs; changes in interest rates and general economic, business and political conditions in the United States generally or in Illinois in particular, including in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “will,” “propose,” “may,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.CONTACT:
Matthew Keating
HBTIR@hbtbank.com
(310) 622-8230
HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Statements of IncomeHBT Financial, Inc.
Consolidated Financial Summary
Consolidated Balance SheetsHBT Financial, Inc.
Consolidated Financial Summary
HBT Financial, Inc.
Consolidated Financial Summary
HBT Financial, Inc.
Consolidated Financial Summary

HBT Financial, Inc.
Consolidated Financial Summary


HBT Financial, Inc.
Consolidated Financial Summary
HBT Financial, Inc.
Consolidated Financial Summary


Reconciliation of Non-GAAP Financial Measures –
Adjusted Net Income and Adjusted Return on Average Assets


Reconciliation of Non-GAAP Financial Measures –
Adjusted Earnings Per Share


Reconciliation of Non-GAAP Financial Measures –
Net Interest Margin (Tax Equivalent Basis)
Reconciliation of Non-GAAP Financial Measures –
Efficiency Ratio (Tax Equivalent Basis)
Reconciliation of Non-GAAP Financial Measures –
Tangible Common Equity to Tangible Assets and Tangible Book Value Per ShareReconciliation of Non-GAAP Financial Measures –
Adjusted Return on Average Stockholders’ Equity and Adjusted Return on Tangible Common Equity